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Two brothers, Mark and Rick, each inherit $6000. Mark invests his inheritance in a savings account with an annual return of 2.5%, while Rick invests his inheritance in a CD paying 5.8% annually. How much more money than Mark does Rick have after 1 year?

User Nechehin
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1 Answer

3 votes

Answer:

$198

Step-by-step explanation:

Two brothers Mark and Rick each inherit $6,000

Mark invests his money in a savings account with an annual return of 2.5%

After one year the interest payment that will be received by Mark can be calculated as follows

= $6,000 × 2.5/100

= $6,000 × 0.025

= $150

Rick invests his portion of the money in a CD paying 5.8% annually

The amount of interest that will be received by Rick after one year can be calculated as follows

= $6,000 × 5.8/100

= $6,000 × 0.058

= $348

Therefore the amount of money that Rick has over Mark after a period of one year can be calculated as follows

= $348-$150

= $198

Hence Rick has $198 more than Mark after one year

User Lash
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